Valuing long-held stock for property division poses a challenge

On behalf of Allison Maxim of Maxim Law, PLLC posted in Property Division on Friday, March 28, 2014.

We suspect that asset value is not something that tends to be top of mind for most couples in Minnesota, at least not while they are happily married. But if circumstances happen to change and the couple determines they need to divorce, getting a solid valuation of all possible assets becomes critical to be sure that equitable division of property is achieved.

That may not be a big job in most cases, but in those in which the couple has accumulated a great deal of wealth over their years of marriage, it can be a dicey proposition, requiring a lot of professional help, especially that of an experienced attorney. Stock values may present special challenges, as may be seen in the case of billionaire oil man Harold Hamm.

He is in the process of divorcing his wife after 26 years of marriage. The case has been underway since 2012 and is slated to go to trial in July. Ahead of that, some issues have been brought before the court, one of them being the disposition of 125 million shares of stock.

Those shares give Hamm controlling interest in his company, Continental Resources Inc., But there is some speculation he could lose that control because of a recent ruling that appreciation of the value of that stock during the marriage should be subject to division as a marital asset.

Hamm had sought to have the stock declared a premarital asset and the judge apparently agreed with that assessment. But he said the increase in the stock’s value during the marriage deserves equitable division.

Analysts say this is tricky because it’s not clear how the valuation of will be done. The judge might be faced with deciding how much of the gains were the result of market conditions and how much can be credited to Hamm’s actions. One attorney says market gains probably couldn’t be counted as divisible.

Then, there’s the question of how the division might be handled. Analysts say the judge could order a split of shares, which some speculate could erode Hamm’s controlling interest. Estimates are that he would have to sell or transfer about $4 billion in stock to lose his stake.

Observers offer the opinion that both sides will have their own experts arguing for how the division should be handled.

About Allison Maxim

A Rising Star Attorney for three years in a row, Allison Maxim is a skilled and professional attorney with experience in all areas of family law, providing sound, effective legal counsel to individuals and families. Learn More >